South Africans owe much to the efforts of its flotilla of activist non-profit organisations. Especially those like Solidarity’s Research Unit, which invests great effort in challenging seemingly endless irrational legislative proposals from the ANC- as it is doing once again after the ruinous National Health Insurance bill passed through Parliament last week. In this powerful assessment, the unit’s head Connie Mulder puts the ANC’s unaffordable, irrational and un-implementable proposal to the sword, sharing some of the arguments that Solidarity will make in court. The true mystery is why the ANC persists with ideas that are certain to be blocked in the courts, which remain the primary power in any Constitutional Democracy. Perhaps it’s time for taxpayers to demand that political parties, and those driving them, are held personally responsible when they waste the country’s scarce financial resources in such obvious vote-pulling ploys? – Alec Hogg
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Relevant timestamps from the interview
- 00:00 – Introductions
- 01:24 – Connie Mulder on the SRI’s recent court case over government’s proposed state of emergency
- 03:14 – Mulder on the ANC’s proposed NHI bill
- 06:07 – On why Solidarity are taking action against the bill
- 08:26 – On what Solidarity aims to achieve in taking the bill to court
- 12:13 – On the main drivers of the NHI bill in government
- 15:32 – On the knock-on effects of the bill
- 20:29 – Conclusions
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Full edited transcript of the interview
Alec Hogg: I love having rational conversations based on fact, exposing the truth, and getting away from the narrative and all the nonsense we have to put up with on a day-by-day basis. Connie Mulder is the head of Solidarity’s Research Institute, and he’s a man who goes straight to the heart of the matter. The last time we spoke, it was about the state of emergency that President Cyril Ramaphosa wanted to impose because of the electricity crisis. Today we’re talking about National Health Insurance. If anything, an even hotter topic. Connie, let’s start with our last conversation, your court action against the government on the proposed state of emergency….If I recall, you were very worried that the government would be using this as an excuse to impose once again the type of state of disaster that they did during COVID – an abuse of the system, in your opinion. How did the court action go for you?
Connie Mulder: Well, Alec, it’s one of those paradoxical things where the court action went very well, and we didn’t have to go to court. When the court date was looming, and the government needed to file their response, it wrote us a letter stating that it would withdraw the state of disaster if we then withdrew our court case. Then we answered the standard answer, which is okay when you remove it. There’s no use in going to court, and shortly after that, you might recall they terminated the state of disaster prematurely, which is, for interest sake, exactly how the COVID state of disaster ended as well. They were on their way to get a bruising in court and knew they would get smacked around. And in this case, especially, I don’t know if we mentioned it last time. Still, in their answering affidavits and discovery, they attached several emails in which their counsel explicitly stated this was entirely unnecessary two days before the state of disaster. We’ve got the legislative instruments. This won’t hold up scrutiny in court. And they still went ahead and went that way. So in the letter, for interest sake, they asked us to withdraw and offered to pay all our legal costs if we withdrew. And that essence happens as Africa is not officially in a state of disaster regarding electricity. It might feel disastrous, but the legislative instrument has been taken out of their hands.
Read more: Cyril’s ‘State of Disaster’ grab is irrational, Courts will stop it – Solidarity’s Connie Mulder
Alec Hogg: It’s extraordinary that politicians use other people’s money, such as our money as taxpayers, to pursue these, not vendettas, but these crusades, would actually aren’t, make absolutely no sense. And I guess you will argue the same way with national health insurance, and we will go through exactly why. But this has been on the table for a long time. When did the research institute start investigating and start researching it?
Connie Mulder: So this has been on the table for almost 20 years now. We started, well, I jumped at the Research Institute in 2017, and that’s when we started from, well, I started at least on the NHI. And it’s been a constant struggle to get just basics out of government. Thus far, I think we’re the only ones who did a costing as part of our parliamentary presentation and as part of our court documents to say what it will cost. The government does, to this date, not on a proper costing. We have no idea. We still don’t know if we’ve sent access to any information applications, but we don’t know what it will cover. They cannot state what NHI is going to cover. And that means now the debate has heated up, but it does now and then, with the government forcing this bill into its limp and truly horrid state, which is several gaps no one knows. No real costing model, but they forced it through parliament, which means it’s now going to the NCOP and then the president needs to sign it. So just for listeners who might not know, the NHI is government’s initiative to basically implement one central medical aid that everyone in the country belongs to and that is funded by tax money, and this will then be a central procurer of all medical services.
Thus doctors will be contracted to this fund. Every doctor will need to work for this fund and government will then determine what you can get as a medical service and what is going to pay a contractor or a doctor for that medical service on your behalf. All of this is administrated centrally and then funded by tax money with the one caveat explicitly stated that private medical aids may not cover anything that the NHI covers. So that’s why it’s very important what NHI actually covers, but they just can’t tell us. They are saying, no, it’s going to be staggered, but they won’t tell us. So from our perspective, this is a massive existential problem, is you’re going to ‘Eskom’ healthcare. That is exactly what’s coming. And that is why, well, we can go into that, but we’ve been vocal critics repeatedly. And we’ve actually, we did our parliamentary presentation in the form of court documents to send the message quite clearly that if you go ahead with this, we will be heading to court immediately. This piece of legislation is in dire straits in terms of plain rationality. It doesn’t make any sense. We will stop this using the legal system.
Alec Hogg: Why is it left to you to do this? And I ask this because the vested interests of medical aid companies like, we know all the names, Discovery, Momentum, Liberty, and the private hospitals have to be even far, far greater than Solidarity Research Institute’s view on this. And yet you’re the guys who are making the running.
Connie Mulder: Yes, Alec. So we’re not alone in this. Several of these private hospital groups have indicated that they will be opposing, but the difference being is we’re not that in bed with government. In fact, they don’t like us that much, but it’s reciprocal. We don’t like them as much either. So that’s fine. We’ve repeatedly stated we don’t like the government, but we do love the country. And that is why we do a lot of these things. Medical aids and especially healthcare is a very regulated environment. and angering the health department isn’t good for business for any of these medical aides. There’s a lot of loopholes that can be closed or regulations that can be imposed that would have severe impact. On the one hand, I think medical aides like Discovery are of the impression that they will be the ones administering this big fund. The government has stated that’s not the case, but it’s plain as daylight the government does not have the capability to do this, so this will most likely end up in a massive tender that somebody will have to get. to actually administer it.
From our perspective, the reason we’re busy with this is quite simple. Our members overwhelmingly have private medical aid. This is an unfortunate circumstance. For the simple reason we would want public health care to be at a place where you can actually use it. I was born in a public health hospital. I’m assuming you were born in one as well. Public health care was of an excellent standard in South Africa, and it has been mismanaged into the ground. And we would like that to return. But NHI is not the way. What we’re seeing, what’s going to happen to NHI is not that the public healthcare will be pulled up to the private healthcare sector, the exact opposite. It’s the private healthcare sector which is still excellent at really providing excellent medical health, medical cover, will be pulled down to the public healthcare sector. And this is for the simple reason that the people who are going to run it are the same people who ran Eskom into the ground, ran the post office into the ground, is the same ideology, is the same idea of central planning of healthcare, which… barely works in developed countries that have gotten it to work, if you look at what the NHS with all those problems that Britain is facing. But we foresee that there is absolutely no chance of that working in South Africa. It will only destroy the private healthcare sector. It won’t actually fix any of the fundamental problems in the public healthcare sector.
Read more: 50 Reasons why the NHI will never work
Alec Hogg: What exactly are you wanting the court to rule on?
Connie Mulder: Well, from where we’re sitting, there’s two aspects. The one is the constitutionality of this bill. The department plays a bit of semantics, semantic gymnastics with this saying everyone has the right to healthcare. Now that is not actually what the constitution says. The constitution explicitly states everyone has the right to access to healthcare. And it doesn’t state what quality that healthcare should be. So on a cynical route, that right is already encapsulated or realized in the public healthcare sector. anyone can show up to any hospital at any point and say I need health care. So it’s already realized, it’s not that they’re realizing a right that’s not realized. It’s very technical but it basically means we’ve got a public health care sector. You can show up. We’ll talk about what’s going on in the public health care sector and why we’re of the opinion we should rather fix that. So on the one hand that, on the other hand it’s just on rationality which is what is the rational reason. for implementing something from what we can see. This is going to cost a lot of money. We did the math last year. If they use the personal income tax surcharge they would need to add 20% to your income tax percentages, 20 percentage points. Or they would need to lift VAT to 20% as well, from 15% to 20%, or increase company tax from 28% to 42%. They’re talking about a payroll tax, which I have no idea why, but the whole payroll will be taxed and then after that, at 5.5% as well. So we’re talking about massive increases in taxation to be able to fund this.
And if we’re talking about those levels of increases given South Africa’s economic outlook, it’s not rational on the one hand, it’s completely unaffordable. On the other hand, it’s unnecessary. We already have a public health sector. We spend… billions in terms of percentage of GDP, we spend more than most developed countries on our healthcare sector. Now, if we get bad health outcomes, that doesn’t mean we need to spend more. And I use the example saying, if I send my son to the grocery store and say you need to buy bread and milk and he comes back with M&Ms and he spent a hundred rand on that, then the answer isn’t to give him 200 rand and say go back to the store. The answer is to make sure that someone else does the shopping. And that is what we’re seeing here is we’ve got a public health care sector that shops very badly. They spend millions or billions of rands for extremely bad health outcomes. And the government’s answer is, well, we just need to give them more money. That doesn’t make any sense. It doesn’t make it doesn’t compute. The private health care sector shops much better and government is now saying, well, you guys are spending your money wisely, but that’s not something that we want in South Africa. We need you to come in. and then we’re not going to fix the public healthcare sector, we’re just going to throw more tax money on it. And then surely if we start spending eight or 16% of GDP on healthcare, then there has to be better outcomes. But it’s not that simple when you’re dealing with a fatally flawed, systemic corrupt public healthcare sector, which is why we are where we are.
Alec Hogg: Who put this whole bill together? And the way you’ve explained it is it’s rational, logical. We know the consequences of socialism pretty much everywhere in the world. Here in South Africa, it, it’s in your face, uh, because of the inability for company, for, for the state to deliver. And we know that with SOE as you spoke about Eskom, do we need to be reminded? But who’s actually driving this? Where does what appears to be a fantasy come from?
Connie Mulder: It’s been a long time coming. The first committees of inquiry into NHI was started in 1995 actually. At the moment, it’s the Ministry of Health that’s driving it. I think it’s Dr. Nicholas Crisp being the main appointee who’s trying to get this bill through. But it started, the irony is there were several committees of inquiry, as well as Social Security, the commissions of inquiry, the committee on the NHI explicitly, and all of them found that it’s unaffordable. But that has never stopped a socialist. So what we’re seeing is we’ve got the Department of Health and in this case, the only thing that makes sense to us is this is a desperate attempt to tick a box because this is part of the ANC’s policies. They should be implementing NHI. It was once again discussed at Nasrec in the policy conference last year that they need to make haste with implementing NHI. And that means it looks like it’s sort of a tick box exercise.
So, all right, we’ve now gone ahead, especially when you’ve got legislators who say, well, we’ve implemented it, but don’t worry. It’ll only take effect in 15 years. And the question is, well, what are you doing exactly? Why are you trying to destroy healthcare at this point? It doesn’t make any sense. So, it’s purely political reasons currently. They surely know. A bill of this magnitude, as Dr. Phaahla correctly stated, it’s the most revolutionary bill that parliament has passed to date. It has to be watertight and this thing isn’t. It has severe shortages. It doesn’t have a proper costing model, all of those things. It’s going to get most likely, well, it’s going to lose in court almost immediately and there’s going to be several court challenges. And that’s the part that puzzles me is why the NC knows exactly. We told him we’re going to go to court the moment you pass this. And why didn’t they then go back and try and make it watertight and pass this leaky bill that’s not going to do anything else than score them a bit of political points until the courts overturn it, but that will most likely only be after next year’s election. So the cynical part of me says it’s a short-term political ploy. Unfortunately, it has long-term consequences on. of health care workers as well as the certainty of are we still going to have a job, as simple as that from our members in health care who don’t know if they’re still going to have a job when NHI comes through.
Read more: National assembly adopts the fatally flawed and harmful NHI Bill
Alec Hogg: I think we’ve all got our stories, but I’ve certainly been on airplanes traveling internationally where people from South Africa have gone to the UK to benefit from their national health insurance or NHS sector that they have there. But that’s expensive. You’ve got to get a flight, you’ve got to have a passport, you’ve got to get a visa. Once you arrive there, of course, you can use the system. In South Africa, one just thinks logically, we have porous borders, we have lots of illegal immigration. If you have free healthcare in this country, which is presumably what the ANC is aiming for here, it would accelerate the movement of people from to the north of us, with all of its knock-on effects. I wonder if these kind of issues, these kind of practical issues have been brought, have been put on the table.
Connie Mulder: It’s been put on the table, but there’s been no heed paid to it, no attention. Government just doesn’t believe that that’s going to happen. So just one caveat is there’s actually no such thing as free healthcare. Someone pays. In the UK, it’s just tax-based healthcare. So you don’t pay with it directly at the doctor, but you do pay for it every month in your tax money. In South Africa, it’s the same situation. Taxpayers are going to have to pay for this healthcare. But once we go to free healthcare, we’ve already got… free healthcare to a large extent and most indigent people, if you’re below a certain income level, healthcare doctors cannot charge you at the public hospitals. You will be helped for free to a large extent, especially if you’re going into trauma or emergency situations. So that is why we’ve got the problem of immigration at the one point, but if we try and expand it, and that is the promise that the ANC tries to sell.
And it’s a… It’s cynical to sell this to desperate people who are then telling them you are going to be able to go to a private hospital and get the best private healthcare without paying a cent for it. Now this is a dream. It’s not going to happen. We’ve seen what happens to countries with our income levels that do implement this and that is you will have Cuba’s healthcare system, which is free. You can absolutely stand in the queue and then die in the queue for free. You will not have to pay any money. but you will not necessarily actually get health care. These things don’t work together. What we’ve proposed repeatedly is South Africa has a public health care system. We are spending billions of rants on it. If we’re not getting good outcomes there, then surely the start is to say, let’s fix public health care. And the moment you get a situation where public hospitals actually get clean audits, public health departments get clean audits. and we’ve once again started reaching the health outcomes that we need to in public health care. Then we can have a discussion about is this sufficient or not. But at the moment we’ve got government who’s mismanaged public health care and now wants to go bigger.
So the allegory I use is this is somebody who’s driving down the road in a car and then they hit every single obstacle, every road, every speed bump, hit a couple of other cars and then when they stop they get out and they say, you know what I should be doing? I should be flying Boeings. And that is exactly what this is. If you can’t get our current public health care system right, and that is because there’s no proper oversight. We’ve got systemic issues with providers, just plain stealing, we’ve got crooks in there. They’re still going to be there. You’re just going to increase their funding with this new system. And we don’t foresee anything good happening in that aspect. We’re not of the opinion that healthcare at the moment is in a good state in South Africa. Don’t be fooled. We’re not going to sit back and say, well, you guys can die outside. We’ll eat our cake in here. And this is not where solidarity is at. We’re saying we need to fix public health care. We need to do it very urgently. But the way to fix it is not this. It’s not destroying private health care, which still works, and then throwing more money at a corrupt system. This is not going to fix the situation. What we need to do is fix public health care. Whilst maintaining private health care, because private health care is sort of the one shining example and there are several proposed solutions.
The one is force medical aids to have a very low income option, which the government then can subsidise for poor people if necessary. That would enable, it’s sort of almost a voucher system, but that would enable people who don’t have access to private health care at the moment to use the competitive forces of the market and to use a wallet bigger than their own. government budgets to get access. But that entails keeping private medical aids around, allowing people choice, giving private medical aids the option to use competition to drive down costs. All of these things, which makes sense from a community standpoint and from an economic standpoint, not having one big central fund that has failed almost everywhere. It’s been implemented that leads to what we’ve seen. It’s going to lead to massive white towns in the UK now. The last time we checked you out, you had an almost two week wait time to see a GP if you apply. Now, this is a first world country with a massive tax base. South Africa is going to be in a situation where you will have to see GPs illegally in dark alleys and people will be hearing headaches in dark alleys. This will be the new illegal situation, which is what happens in Cuba is you’ve got pharmacies that sell normal drugs, but do it on the black market. And that is… We don’t want to go there. We don’t need to be there. As a country, there are several things we can do to fix this before trying to rebuild, well, to basically burn the house down and then believing we’re going to build it back from scratch.
Alec Hogg: Well, at least we do have a legal system which enables us to have these kind of legal challenges. So more strength to your elbow, Connie Mulder. Thank you for sharing the rational perspective of the National Health Insurance Proposal. How those politicians believe that they’re going to change things this time is beyond most logical brains. But who knows what’s going on in their minds? Perhaps it is just a political ploy. Connie Mulder is the head of the Solidarity Research Institute and I’m Alec Hogg from BizNews.com.
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